In the last few years, demand response (DR) programs, which pay companies for their willingness to reduce energy usage when called by the utilities, have been a "killer app" for many participants. DR incentives are paid to organizations based on how much peak demand can be reduced, i.e. more peak demand = more money.
Utilities, ESCO's like Groom Energy, and DR providers like as Constellation Energy (C-Power), Comverge, EnerNOC, and Johnson Control (EnergyConnect) perform load analysis to determine how best to maximize the demand reduction, without unnecessarily impacting a company's operations.
The dollar amounts can be stunning - from a few thousand dollars for a 100kw backup generator to several million dollars per year for multi-megawatt load reductions. One industrial firm told us they received $2m in demand response fees during 2010, and another said they used DR proceeds to keep their plant operational during a very slow quarter in the midst of the recession. Other companies receive $10K-$25K per quarter and use this money to fund energy projects and to procure energy management software and submeters.
SUPERVALU reported receiving $75,000 per year in demand response fees.
Not surprisingly, senior managers become engaged when they learn about this no-cost, free money, energy efficiency program.
Awareness of the benefits of these programs grows and the USGBC is working on a pilot to get LEED credit for demand response.
However, demand response programs are not available in all US locations and each regional program has its own scope and rules. Here is one directory of providers.
Facility, energy, EHS, sustainability managers should ensure their organizations are taking advantage of these important financial incentives.
You can learn more about the latest demand response developments at our Nov. 2nd Enterprise Smart Grid conference, specifically:
- Learn how American Water, Beacon Capital Partners, Boston Sand and Gravel, Genzyme, Millipore, Staples, and others utilize demand response
- Learn about DR trends (such as the new FERC ruling) from experts from EnerNOC and Schneidler Electric
- Network with the many attendees
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